Lower taxes, higher revenue.

Hi Brit,

Considering the tax rates y’all have, you should send a copy of, Sharp fall in US budget deficit, to Blair.  It seems that, even though our Government has lowered taxes over the past several years, revenue flowing into the Federal coffers is at all time highs, $834 billion in the last quarter.  Of course, our politicians are still managing to increase spending fast enough to fritter away the gains, but that’s nothing new.

the Grit

8 Responses to “Lower taxes, higher revenue.”

  1. bloggernista Says:

    Grit, you can chalk up the huge increase in federal spending to George Bush and his unnecessary war in Iraq and his penchant for cutting taxes for the wealthy. And, of course, he is pushing for more tax cuts. He is truly delusional.

  2. britandgrit Says:

    Hi b,

    You are partially correct. Bush certainly could do more to keep spending down, however, I doubt he would get the great press coverage that Clinton got when he vetoed a budget. The war in Iraq, by the way, isn’t Bush’s war. It was authorized by a large majority of Congress. The tax cuts, you should note, have increased revenue to the Government.

    the Grit

  3. thelonedrifter Says:

    “increased revenue to the Government.”

    Not spending, revenue. BIG difference.

  4. britandgrit Says:

    Hi thelonedrifter,

    Indeed you are correct! It would seem that no matter how much we, the people, donate to the Federal coffers, our representatives will always be able to spend more. Besides armed revolt, I am at a loss for a solution.

    the Grit

  5. britandgrit Says:

    Hi Grit

    Over the years research has shown that a reduction in direct taxation will, in most cases, lead to an increase in revenue to the public purse.

    There are two reasons for this. Firstly, as it leaves consumers with more disposable income, they tend to increase their spending. This has two effects. Increased demand leads to a higher level of employment. From the government’s viewpoint this means that a) more people are paying direct taxes, more than offsetting the tax lost and b) an side effect is that it also reduces spending on benefits.

    The second increase of revenue occurs from the fact that with more disposable income, consumers will go for higher end and luxury products, which of themselves have more “stealth” taxes attached to them. In addition it adds to business profits, which again increase public tax revenue.

    By the way, I assume that the article from the BBC that you referred to does not tell the whole picture. Although it states that revenue has increased to $834 billion, it also says that spending has increased to $876 billion. With spending exceeding income, it is difficult to see budget reductions. Thus there must be hidden revenues in the US not included in these figures.

    There must be further information on this somewhere my friend.

    the Brit

  6. britandgrit Says:

    Hi Brit,

    It was a reduction as compared to the projected budget deficit. Projections over here are generally considered as akin to Divine Revelation, so any different outcome draws great attention.

    the Grit

  7. taxrefunds Says:

    What annoys me is that we pay enough in taxes but half the time we overpay tax and the goverment do not tell us, and the onus is on us to tell them. Luckily I heard about a company (http://www.taxfix.co.uk) which helped me get all my tax back.

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